Before formally exiting the EU in March 2019, the UK will need to implement the latest EU pensions directive which will impact the way UK pension schemes operate. Although the changes are not imminent, scheme trustees and company representatives should be aware of what is coming and reflect this in upcoming activities and strategic planning.
IORP II is the name commonly given to an EU directive that came into force on 12 January 2017. It prescribes requirements on the financing, governance and supervision of IORPs (Institutions for Occupational Retirement Provision).
Who does it affect?
The directive applies to all IORPs based in EU. IORP is a term used by the EU and its agencies, and it refers to “an institution, irrespective of its legal form, operating on a funded basis, established separately from any sponsoring undertaking or trade for the purpose of providing retirement benefits in the context of an occupational activity on the basis of an agreement or a contract….””
In a UK context, IORPs are funded occupational defined benefit and defined contribution schemes, but not personal pension schemes.
Read our report 'Pension governance and disclosure is changing' to find out more about IORP ll, how it will be implemented and a timeline for implementation.